Blackstone Prepares for $1.3B Purchase of WIllis Tower

CHICAGO—Blackstone GroupLP has agreed to buy the iconic Willis Tower for $1.3 billion, the most ever paid for a US office building outside of Manhattan, the Wall Street Journal reported last night. The sellers, New York-basedJoseph Chetrit and Joseph Moinian and Skokie, IL-basedAmerican Landmark Properties paid $841 million for the building, then known as the Sears Tower, in 2004. The seller and its representatives could not be reached by press time.

Lately Blackstone has concentrated on selling the assets it still holds as a result of its $39 billion leveraged buyout of Sam Zell’s Equity Office Properties Trust in 2007. In 2014, the New York private-equity firm sold a set of Boston skyscrapers for more than $2 billion to Canadian investorOxford Properties Group and the asset-management arm of J.P. Morgan Chase & Co., and it recently sold a set of Silicon Valley office buildings to Google Inc. Also in 2014, Blackstone agreed to sell 1095 Ave. of the Americas in Manhattan for about $2.25 billion to a venture led by Canadian property investor Ivanhoé Cambridge.

The deal for the 42-year-old Willis was reached over the weekend, WSJ reported. Douglas Harmon of Eastdil Secured was the exclusive representative on the transaction.

Blackstone will renovate and upgrade the building’s retail section and the observation deck. The company hopes “to really make this more of a comprehensive tourist attraction,” Jonathan Gray, Blackstone’s head of real estate, told WSJ.

Although the overall price is high, the tower’s age and less-than premium location meant it sold for far less on a per square-foot basis than top office properties in the Loop. Last summer, for example,KBS Real Estate Investment Trust II sold 300 N. LaSalle to the Newport Beach, CA-based Irvine Company for $850 million, until now the most ever paid for a Chicago office building, and about $653 per square-foot. Blackstone got the Willis for the comparatively cheap price of about $340 per square-foot.